Friday, May 23, 2008
How Does the American Economic Association Invest?
The American Economic Association (the World's top academic economics society) has an $18 million dollar potfolio. They're currently invested 85% in stocks and 15% in bonds. 55% of the total is in US equities and 30% in foreign equities. In April 2007 they reduced the bond percentage from 35% to 15%, which mirrors my more recent moves in my own and my Mom's account. But I made this move after the 2007-8 stock market correction not before it. Still their moves out of high-yield corporate bonds and the total bond market into investment grade bonds were well timed. As Mankiw notes it's surprising they don't have any real estate and I'd add any of the alternative assets such as private equity and hedge funds that the best performing university endowments have. Well, I guess they are a bit too strong believers in efficient markets to do anything like that...
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2 comments:
18 Million is a very small endowment portfolio. They're pretty much shut out of top tier HF & PE managers. I bet they ask themselves "should I pony up a few million to invest in a sub-par hedge fund that packages beta as alpha while charging 2/20".
It is weird that they're not invested in any real assets. I'm guessing the board of directors are more worried about other issues and just can't devote much time and effort to eek out a few more basis points on the portfolio.
Yes that is true, but there are funds of funds. And there are non-US listed products. Any of the tax issues that US investors face there that I learnt about recently are mitigated by being a non-profit.
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